Consumers can save up to 55% on hot water bills, and get a $300 tax credit by choosing the most efficient qualifying model of water heater.

New Energy Star labels are being rolled out this month, and could offer consumers shopping for a new hot water heater a chance to save from between 7.5% and 55% on home water-heating bills.

New standards went into effect Jan. 1, and even stronger standards will be phased in beginning in September 2010. Buying an Energy Star-labeled water heater in Phase 1 will save the average consumer between $26 and $277 a year, depending on the type of water heater, according to the Department of Energy.

The new standards apply to gas storage water heaters, whole home gas tankless water heaters and solar water heaters. Later this year, Energy Star standards will apply to gas condensing and heat pump models.

However, not all Energy Star-rated water heaters qualify for the $300 tax credit available for energy efficiency improvements made to the home in 2009. The tax credit will not apply to high-efficiency gas storage water heaters, even if rated by Energy Star.

For a complete list of qualifying home improvement projects, visit the Energy Star website

Source: The Daily Green